The case, decided in Zavala County, in the District Court for the 365th Judicial District, is Longview Energy Company v. The Huff Energy L.P., Riley-Huff Energy Group LLC, William R. “Bill” Huff and Rick D’Angelo.

The jury found that the defendants abused their positions as directors of the company, breaching their fiduciary duties and misusing proprietary and confidential information.

The Eagle Ford Shale, in South Texas, is an oil and natural gas field in at least 24 counties.  Wells in the northern portions of the Eagle Ford often produce more oil while those in the southern sections generally produce more gas.

Whether the plaintiff will be able to collect the full $162 million is a matter of dispute.  The jury found that assets worth $42 million were wrongly obtained by Riley-Huff Energy Group, and that the company also received past revenues of $120 million due to the failure of the two directors to act within their fiduciary duty.  The defendants’ attorneys have noted that the jury found the company spent $24.5 million in exchange for certain assets, and spent $127 million developing them.

Longview Energy Company is incorporated in Delaware, and the issue of whether the laws of that state allow the offset of funds used to obtain or develop assets, when a jury finds they were acquired through breach of fiduciary duty, was disputed by both sides in the case.

The lawsuit moved through the courts quickly, reaching a jury verdict just nine months after the case was filed.  The suit alleged that directors Huff and D’Angelo breached their duties to Longview, taking corporate opportunites for themselves, to gain hundreds of millions of dollars.  The two were also accused of misusing corporate information, and fraud.

The lawsuit further accused The Huff Energy Fund – a shareholder in Longview – and competitor Riley-Huff, of conspiring with D’Angelo and Huff to obtain assets for themselves, using their positions as Longview directors to gain information about the assets.

The lawsuit states that after directing Longview to look into purchasing assets in the Eagle Ford Shale, D’Angelo, Huff, and others founded Riley-Huff with the intention of acquiring the corporation’s opportunities for themselves.

The jury’s verdict finds that the two directors breached their duty to the company when they obtained the assets for themselves, and that Riley-Huff and Huff Energy participated knowingly in the directors’ actions.

Gregory D. Jordan is an Austin oil and gas attorney, Austin oil and gas litigation attorney, and Austin business litigation lawyer. To learn more, visit Theaustintriallawyer.com.

When Aston Meadows bought the land, no oil and gas production was occurring. But in 2007, they sued Devon and its parent company for allegedly drilling horizontally under their property. Aston claimed that Devon’s lease was invalid because it was not recorded in Tarrant County’s records. Aston claimed they were owed damages for trespass, conversion, breach of contract and unpaid royalties, and that they were entitled to injunctive relief.

The Texas Property Code generally provides that a property transaction is properly recorded when it is recorded in the county wherein a “…part of the property is located”. This thereby gives notice to everyone of “…the existence of the instrument”. When a piece of land crosses multiple counties, if a transfer involving that land is recorded in either county, it is usually deemed sufficient constructive notice to all persons of the transfer.

Since the lease owned by Devon Energy spanned two counties and was recorded in one of them, the appellate court affirmed the trial court’s judgment in Devon’s favor.

Oil and gas disputes can be complex. They involve precious land assets and may turn on intricate issues of title. Aston Meadow’s title policy did not show the lease as an encumbrance. Nevertheless, Aston lost their case. This case illustrates why it is crucial to have a knowledgeable and experienced Texas oil and gas attorney in your corner if you are dealing with an oil company or involved in an oil and gas dispute.

Gregory D. Jordan is an Austin oil and gas attorney, Austin oil and gas litigation attorney, and Austin business litigation lawyer. To learn more, visit Theaustintriallawyer.com.